Niva Co. Manufactures three products: Bales; Tales and Wales. The selling prices are: 55; 78; and 32 respectively. The variable costs for each product are: 20; 50: and 15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours p...
18 Jun 2021Fe Company has only 25,000 hours of machine time each month to manufacture its two products. Product X has a contribution margin of P50 and Product Y has a contribution margin of P64. Product X requires 5 machine hours and Product Y, 8 hours. If Fe wants to dedicate 80% of its ma...
18 Jun 2021Luzon Fabricators, Inc. estimates that 60,000 special components will be used in the manufacture of a specialty steel window for the whole next year. Its supplier quoted a price of P60 per component. Luzon prefer to purchase 5,000 units per month, but its supplier could not guara...
18 Jun 2021An important concept in decision making is described as “the contribution to income that is forgone by not using a limited resources in its best alternative use.” This concept is called A. Marginal cost C. Potential cost B. Incremental cost D. Opportunity cost
18 Jun 2021The potential benefit that may be obtained from following an alternative course of action is called A. Opportunity benefit C. Relevant cost B. Opportunity cost D. Sunk cost
18 Jun 2021For the year ended December 31, 2004, Earth Company incurred direct costs of P500,000 based on a particular course of action during the year. If a different course of action had been taken, direct costs would have been P400,000. In addition, Earths 2004 fixed costs were P90,000. ...
18 Jun 2021The Auto Division of Fly Insurance employs three claims processors capable of processing 5,000 claims each. The division currently processes 12,000 claims. The manager has recently been approached by two sister divisions. Division A would like the auto division to process approx...
18 Jun 2021A cost that will not be affected by later decisions is termed a(n): (E) A. historical cost C. sunk cost B. differential cost D. replacement cost
18 Jun 2021In a cost-based pricing system the markup should cover I. Selling and administrative expenses II. Desired profit III. Manufacturing cost A. I, II, and III C. I and III only B. I and II only D. II and III only
18 Jun 2021Assume the Blade Division is now at capacity and sufficient demand exist to sell all production to outsiders at present prices. What is the differential cost (benefit) of producing the blade internally? A. P2,500 benefit C. P7,500 cost B. P0 differential cos...
18 Jun 2021Should Dana allow its Lawn Products Division to purchase the blades from the outside supplier, and why? A. Yes, because buying the blades would save Dana Company P500. B. No, because making the blades would save Dana Company P1,500. C. Yes, because buying the blades would save...
18 Jun 2021Plastic Division makes and sells a single product. Presently it sells 12,000 units per year to outside customers at P24 per unit. The annual capacity is 20,000 units and the variable cost to make each unit is P16. All selling expenses are fixed. Light Division would like to buy 1...
18 Jun 2021Materials used by Aro-Products Inc. in producing Division 3s product are currently purchased from outside suppliers at a cost of P5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division...
18 Jun 2021Universal Company has intracompany service transfers from Internal Division, a cost center to World Division, a profit center. Under stable economic conditions, which of the following transfer prices is likely to be most conducive to evaluating whether both divisions have met the...
18 Jun 2021The worst transfer-pricing method is to base the prices on (M) A. market prices C. budgeted total costs. B. budgeted variable costs D. actual total costs.
18 Jun 2021To avoid waste and maximize efficiency when transferring products among segments is a competitive economy, a large diversified entity should base transfer prices on A. Bargained price C. Market price B. Dual transfer price D. Full cost
18 Jun 2021The following data ate available for the South Division of Banawe Company and the single product it makes: Unit setting price P20 Variable cost per unit P12 Annual fixed costs ...
18 Jun 2021Stevenson Corporation had P550,000 in invested assets, sales of P660,000, income from operations amounting to P99,000, and a desired minimum rate of return of 15%, The residual income for Stevenson is: (E) A. P0 C. P14,850 B. P17,820 ...
18 Jun 2021Two divisions of Halloway Company (Divisions X and Y) have the same profit margins. Division Xs investment turnover is larger than that of Division Y (1.2 to 1.0). Income from operations for Division X is P50,000, and income from operations for Division Y is P38,000. Division X h...
18 Jun 2021The following data relate to the Happy Division of Euphoria Company: Sales P10,000,000 Variable costs 3,000,000 Direct fixed costs 5,000,000 Invested capital ...
18 Jun 2021The following information pertains to Pluto Companys Satellite Division for 2004: Sales P311,000 Variable cost. 250,000 Traceable fixed costs 50,000 Average invested capital ...
18 Jun 2021If the investment turnover decreased by 10 percent and ROS decreased by 30 percent, the ROI would A. increase by 30% C. decrease by 37% B. decrease by 10% D. decrease by 33.3%
18 Jun 2021The best measure of managerial efficiency in the use of investments in assets is: (M) A. rate of return on stockholders’ equity C. income from operations B. investment turn over D. inventory turnover
18 Jun 2021Which of the following does not apply to the content of managerial reports? A. Reporting standard is relevant to the decision to be made B. May extend beyond double-entry accounting system C. Pertains to subunits of the entity and may be very detailed D. Pertains to the entit...
18 Jun 2021The least complex segment of area of responsibility for which costs ate allocated is a(n) A. profit center C. contribution center B. investment center D. cost center
18 Jun 2021The CEO of a rapidly growing high-technology firm has exercised centralized authority over all corporate functions. Because the company now operates in four geographically dispersed locations, the CEO is considering the advisability of decentralizing operation control over produc...
18 Jun 2021Controllable costs are A. Costs that are likely to respond to the amount of attention devoted to them by a specified manager. B. Costs that are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change sl...
18 Jun 2021What term identifies an accounting system in which the operations of the business are broken down into reportable segments and the control functions of a foreperson, sales managers, or supervisor is emphasized? A. Responsibility accounting C. Control a...
18 Jun 2021At the beginning of the current month, Rose had P100,000. Cash disbursements were P2,600,000 and cash collections were P2,850,000. Rose invests all excess cash in a money market fund and has a line of credit to cover cash deficiencies. If Rose wishes to start the next month with ...
18 Jun 2021The Jung Corporations budget calls for the following production: Quarter 1 45,000 units Quarter 2 38,000 units Quarter 3 34,000 units Quarter 4 48,000 units Each unit of product requires three pounds of dire...
18 Jun 2021Isabelle, Industries plans to sell 200,000 units of Batik products in October and anticipates a growth in sales of 5 percent per month. The target ending inventory in units of the product is 80 percent of the next month’s estimated sales. There are 150,000 units in inventory as o...
18 Jun 2021When preparing the series of annual operating budgets, management usually starts the process with theA. Cash budget C. Sales budget B. Production budget D. Capital budget
18 Jun 2021Budget slack is a condition in which A. Demand is low at various times of the year B. Excess machine capacity exists in some areas of the plant C. There is an intentional overestimate of expenses or an underestimate of revenues D. Managers grant favored employees extra time-o...
18 Jun 2021A systematized approach known as zero-based budgeting A. Presents the plan for only one level of activity and does not adjust to changes in the level of activity. B. Presents a statement of expectations for a period of time but does not present a firm commitment. C. Divides ...
18 Jun 2021Zero-base budgeting requires managers to A. Justify expenditures that are increases over the prior period’s budget amount B. Justify all expenditures, not just increases over last year’s amount. C. Maintain a full-year budget intact at all times. D. Maintain a budget with z...
18 Jun 2021The basic difference between a master budget and a flexible budget is that a A. Flexible budget considers only variable costs but a master budget considers all costs. B. Flexible budget allows management latitude in meeting goals whereas a master budget is based on a fixed sta...
18 Jun 2021Bravo Corporation’s master budget calls for the production of 5,000 units of product monthly. The annual master budget includes indirect labor of P144,000 annually. Bravo considers indirect labor to be a variable cost. During the month of April, 4,500 units of product were produc...
18 Jun 2021The standard hours allowed to make one unit of finished product are: (M) A. 1.0 C. 1.5 B. 1.2 D. 1.3
18 Jun 2021The variable overhead spending variance for May was: (M) A. P2,290 F C. P2,290 U B. P1,710 F D. P1,710 U
18 Jun 2021Arlene had an P18,000 unfavorable volume variance, a P25,000 unfavorable variable overhead spending variance, and P2,000 total under applied overhead. The fixed overhead budget variance is A. P41,000 favorable C. P41,000 unfavorable B. P45,000 favorable ...
18 Jun 2021The total variance related to efficiency of the manufacturing operation for November is A. P9,000 unfavorable C. P21,000 unfavorable B. P12,000 unfavorable D. P11,000 unfavorable
18 Jun 2021The fixed manufacturing overhead volume variance for November is A. P10,000 favorable C. P3,000 unfavorable B. P10,000 unfavorable D. P22,000 favorable
18 Jun 2021The controllable overhead variance was A. P505 favorable C. P245 favorable B. P505 unfavorable D. P245 favorable
18 Jun 2021The amount of overhead volume variance for Lucky Company is A. P250 unfavorable C. P750 unfavorable B. P500 unfavorable D. P375 unfavorable
18 Jun 2021South Company has total budgeted fixed costs of P75,000. Actual production of 19,500 units resulted in a P3,000 favorable volume variance. What normal capacity was used to determine the fixed overhead rate? A. 16,500B. 18,750 C. 20,313D. 20,325
18 Jun 2021CTV Company has a standard feed cost of P6 per unit. At an actual production of 8,000 units a favorable volume variance of P 12,000 resulted. What were total budgeted fixed costs? A. P36,000 C. P60,000 B. P48,000 D. P75,000
18 Jun 2021Karla Company use an annual cost formula for overhead of P72,000 P1.60 for each direct labor hour worked. For the upcoming mouth Karla plans to manufacture 96,000 units. Each unit requires five minutes of direct labor. Karlas budgeted overhead for the month is A. P12,800 ...
18 Jun 2021The fixed overhead application rate is a function of a predetermined "normal" activity level. If standard hours allowed for good output equal this predetermined activity level for a given period, the volume variance will be A. zero B. favorable C. unfavorableD. either favorabl...
18 Jun 2021The unfavorable volume variance may be due to all but which of the following factors? (M) A. failure to maintain an even flow of work B. machine breakdowns C. unexpected increases in the cost of utilities D. failure to obtain enough sales orders
18 Jun 2021If actual overhead is P14,000, overhead applied is P13,400, and overhead budgeted for the standard hours allowed is P15,600, then the overhead controllable variance is A. P600 F C. P1,600 F B. P2,200 U D. P1,600 U
18 Jun 2021